High street retailer Lush has bought out its US partner to almost double the size of its sales and pledged to invest in rebuilding its British operations that were hit hard during the pandemic.
The Poole-based retailer, best known for its highly fragranced bath soaps and handmade cosmetics, returned to profitability in its last financial year, according to accounts that will be published at Companies House next week.
Lush’s co-founder, Mark Constantine, said that the chain had taken over its North American partner, which would add more than 80 per cent to its revenues as its single largest market. The deal cost C$180mn, plus C$20mn in deferred payments, and was financed through the sale of property and surplus cash held by the US and Canada businesses.
However, Constantine said that it had written off its business in Russia following the war in Ukraine. The 48 shops in Russia and 15 in Ukraine are majority owned by a Russian citizen, employing over 600 staff.
“There is no prospect of selling the business, as we have suspended the supply of products to Russia. No one knows what the outlook is for the future”, he said, adding that Ukrainian shops in Lviv and Dnipro were still able to open.
As of 30 June 2021, Lush operated through retail outlets in 48 countries and manufacturing facilities in six countries via subsidiaries, joint ventures, licensees and franchises. The total number of shops was 919, down only slightly from the year before.
The group recorded a pre-tax profit of £29mn in the twelve month period, bouncing back from a loss of £45mn the previous year. However turnover fell to £408.7mn from £437.8mn.
Lush put prices up by about 7 per cent before Christmas, which Constantine said would likely absorb rising inflation this year. “We are not planning another price rise in the UK,” he added.
Lush used furlough and other government support of…
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